Since education makes a person more likely to leave your region, how do you justify your investment in human capital?

Thursday, March 29, 2007

Globalphobia

The Wall Street Journal continues its look at the debate about globalization, "As Globalization's Benefits Grow, So Do Its Skeptics." From our "paranoia" about immigrants to the fear of jobs leaving the country, many Americans harbor negative opinions about globalization:

Changes in the global economy aren't making the case for trade any easier. A recent Wall Street Journal/NBC News poll found only 35% of those with at least a four-year college degree believe "that the U.S. is benefiting from the global economy." And these people are more likely to be winners.

For the first time in generations, says Lawrence Summers, the former Treasury secretary, the U.S. is trading on a huge scale with places where wages are 20% or less of American wages. "We've never had that before on as large a scale," he says. That's unsettling. So is the pace of all this. "Because of the Industrial Revolution, within a single human life span (then only about 40 years), it was possible to imagine that living standards would increase by 50% to 75%," he says. At recent growth rates in China, he added, "living standards don't double in a single human life span...they rise 100-fold, or 10,000%." That's good for the Chinese, good for the American worker whose employer sells to China, not so good for the American whose job can be done in China.

The transition to a post-industrial economy was particularly hard on Pittsburgh. So, I can understand any and all anti-globalization sentiment in the region. But those feelings won't stop the train from coming. Furthermore, the shock could be worse this time around. I hope that Pittsburgh will hop on this opportunity, as opposed to fighting it tooth-and-nail.

However, if the "likely winners" fear globalization, the resistance scenario seems much more probable. Also, I doubt the parochial mindset will be of much help. That's why I think the Burgh Diaspora should lead the way. If anyone understands how globalization can be a good thing, it is these economic nomads.